Dispensaries Still Searching for Willing Comp Carrier

Thursday, July 6, 2017 | 0

Medical marijuana dispensaries in Hawaii are still searching for workers’ compensation insurance after the state’s largest carrier said it wouldn’t cover risks in the industry, according to a report by Hawaii News Now.

Hawaii Employers’ Mutual Insurance Co. in June sent policy cancellation notices to seven of eight soon-to-open dispensaries. The carrier said its board unanimously voted not to cover marijuana dispensaries because two independent legal opinions determined the carrier faced “potential exposure for criminal liability” if it insured employers engaged in a business that is legal under state law, but illegal under federal law.

“Due to state and federal vagaries surrounding this new business at the time these applications were initially submitted to us, workers’ compensation policies were issued to these businesses in the normal course of insurance operations,” HEMIC said in a statement. “However, after receiving clear legal opinion on the matter, our board has now acted quickly and appropriately to ensure HEMIC’s conformance with all current and relevant legal obligations.”

Hawaii News Now reports a trade association representing dispensaries is “scrambling” to find coverage.

News reports say one of the eight dispensaries the state licensed last year purchased a policy from a different carrier but don’t identify the insurer.

The dispensaries are set to open as soon as the state Department of Health certifies a lab to test medical marijuana for fertilizers, pesticides and other chemicals, which is expected later this summer.